Auto, FMCG stocks drop as investors book profits after Budget booster

Shares of leading auto and FMCG companies extended declines on Wednesday, February 5, as investors booked profit in these stocks after witnessing a huge Budget-driven rally.

At 10:18 am on Wednesday, the NIFTY FMCG index was down 1%. The index is down for a third straight day and has fallen a cumulative 2.9% during this period.

However, in the preceding three sessions, from January 30 to February 1, the FMCG index saw a cumulative jump of 5.9%. The rise in FMCG stocks after the Budget 2025 announcements aided the rally in the index.

Similarly, the Auto Index was down 0.25% on Wednesday after rallying for four consecutive sessions, from January 31 to February 4, during which it jumped a cumulative 4.6%.

On February 1, Saturday, Finance Minister Nirmala Sitharaman announced that those who are earning up to ₹12 lakh per annum would not pay any tax under the new tax regime. She also revised the income tax slabs under the new regime to reduce tax burden on the middle class. The government’s move is being seen as a positive step to boost savings and consumption.

Reacting to the Budget announcement, shares of consumption-driven companies, from sectors like FMCG, auto and retail, rallied on stock exchanges on Saturday on hopes that a rise in disposable income would boost consumer demand across rural and urban India.